The new payment mechanism. And its effects on the management control systems of health care centers

Abstract: Background and problem discussion: The cost of health care in Sweden has increased and is projected to continue doing so, while at the same time the financial resources are limited. As studies show that different management control systems (MCS) can decrease the cost within the health care sector, it is interesting to see how MCS can solve the financial problem that has arisen. Combined with a new payment reform installed in October 2009, a deregulation of the market has been enacted and brought new health care providers to the Västra Götaland region. The new legal setting in combination with studies showing MCS differences between public and private health care providers make it relevant and interesting to analyze the effect on the MCS. Purpose: The purpose of the thesis is to study the MCS in health care centers, located in the region of Västra Götaland, after the introduction of a new payment mechanism. We will also study possible differences in the MCS for the private versus the public health care centers after deregulation as well as how the differences can be explained. Reviewing and analysis of payment mechanism will also be carried out to increase the knowledge of the effect on the MCS. Methodology: Three case studies have been conducted in the form of personal interviews from each organization. The interviewees are management staff with good knowledge of the MCS in the organization. Literature for the theoretical framework, such as articles and textbooks, has been obtained through searches in large business databases and library catalogues. Scope of the study: The study is executed and restricted to three health care providers within the region of Västra Götaland: Health care center of Olskroken, Kvarterskliniken and Capio. This affects the scope of the study in the way that we will only consider the health care system in the region of Västra Götaland in Sweden. Analysis and conclusion: The new payment mechanism has direct effects on several parts of the MCS of the health care centers. Great changes have been seen in both objectives and control systems at the public health care center of Olskroken with the inspiration of New Public Management. At Kvarterskliniken, the impression is that many MCSs for for-profit organizations are implemented in its MCS, while Capio appears to have a well-structured MSC that was not affected by the new payment mechanism. The controls of the new payment mechanism may create negative side effects. Despite the dysfunctional effects of the new payment mechanism, the changes experienced to be positive. Proposition for further research: Suggestions for further research are to investigate this matter through quantitative methods or comparison of the data with other regions with similar conditions.